Aqua Metals Inc
For the period ended Sep 30, 2024. Filed Nov 14, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 14, 2024
AQMS$1.26+7.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001437749-24-026781
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001437749-24-035288
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 43 previous paragraphs and 42 current paragraphs.
23 unchanged; 16 reworded; 2 added; 4 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 3 previous and 3 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (2)
Current report
Reverse Stock Split
Current report
Effective November 5, 2024, the Company effected a one-for-20 reverse stock split of its issued and outstanding common shares. Accordingly, all common share, stock option, per common share and warrant amounts for all periods presented in the condensed consolidated financial statements and notes thereto have been adjusted retrospectively to reflect this reverse stock split.
Removed paragraphs (4)
Previous report
On May 13, 2024, we entered into a non-binding term sheet with a strategic lender for a secured loan facility in the amount of up to $33 million. The secured loan facility was to be used for the completion of the phase one development of our five‑acre recycling campus at the TRIC. In late July 2024, the lender advised us that it was suspending further activity on the secured credit facility due to continued high interest rates and recent declines in the market price for lithium-ion minerals, which raised concerns on the part of the lender over our ability to meet the lender’s proposed debt service covenants. We intend to maintain communications with the lender with the intent of resuming negotiations in the event of declining interest rates or raising mineral prices. In the meantime, we continue to pursue the required funding for the completion of the phase one development of our five‑acre recycling campus through various sources, including debt, project finance, joint venture and strategic investment options.
Previous report
Net cash provided by (used in) financing activities
Previous report
As of June 30, 2024, we had total cash of $7.8 million and working capital of $1.5 million. As of the date of this report, we believe that we will require additional capital in order to fund our current level of ongoing costs over the next twelve months and move forward with our current business strategy. There can be no assurance that we will be able to acquire the necessary funding on commercially reasonable terms or at all. We intend to seek funds through the sale of equity or debt financing. Funding that includes the sale of our equity may be dilutive. If such financing is not available on satisfactory terms, we may be unable to further pursue our business plan and we may be unable to continue operations.
Previous report
Due to our lack of revenue from commercial operations, significant losses and need for additional capital, there is substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements are issued.
Reworded paragraphs (16)
Previous wording
In February 2023, we acquired a five-acre recycling campus at the TRIC. When fully developed, the facility we design will process up to 10,000 tonnes of lithium-ion battery material each year using our proprietary Li AquaRefining technology. Subject to our receipt of the required additional capital, we expect to complete development of phase. The Company is planning for a phased development of the campus, beginning with the already commenced redevelopment of an existing building on-site into the first commercial-scale Li AquaRefinery, targeting 3,000 tons per annum (tpa) capacity in phase one. In the first half of 2024, we made significant progress on the construction of the planned first phase of the commercial Li AquaRefinery.
Current wording
In February 2023, we acquired a five-acre recycling campus at the TRIC. When fully developed, the facility we design will process up to 10,000 tonnes of lithium-ion battery material each year using our proprietary Li AquaRefining technology. Subject to our receipt of the required additional capital, we expect to complete development of phase one. The Company is planning for a phased development of the campus, beginning with the already commenced redevelopment of an existing building on-site into the first commercial-scale Li AquaRefinery, targeting 3,000 tons per annum (tpa) capacity in phase one. In the first half of 2024, we made significant progress on the construction of the planned first phase of the commercial Li AquaRefinery and we continue to pursue the required funding for the completion of the phase one development of our five‑acre recycling campus through various sources, including debt, project finance, joint venture and strategic investment options.
Previous wording
During the six months ended June 30, 2024, we issued 5,039,383 shares of common stock pursuant to an at the market issuance sales agreement ("ATM") for net proceeds of $2.5 million. On May 14, 2024, we completed a public offering of 20,125,000 shares of our common stock, at the public offering price of $0.39 per share. In connection with the sale of common stock, the Company issued warrants to purchase shares of common stock at the rate of one warrant for every share of purchased common stock, at the price of $0.01 per share. After the deduction of the underwriter’s discount and expenses payable by us, we received net proceeds of $7.3 million. During the year ended December 31, 2023, we issued 3,244,302 shares of common stock pursuant to an at the market issuance sales agreement for net proceeds of $3.8 million. We raised a net of $18.3 million in the third quarter of 2023 from the public offering of our common shares and a net of $4.6 million from the sale of our common stock to Yulho.
Current wording
During the nine months ended September 30, 2024, we issued 306,049 shares of common stock pursuant to an at the market issuance sales agreement ("ATM") for net proceeds of $2.8 million. On May 14, 2024, we completed a public offering of 1,006,250 shares of our common stock, at the public offering price of $7.80 per share. In connection with the sale of common stock, the Company issued warrants to purchase shares of common stock at the rate of one warrant for every share of purchased common stock, at the price of $0.20 per share. After the deduction of the underwriter’s discount and expenses payable by us, we received net proceeds of $7.3 million. During the year ended December 31, 2023, we issued 162,215 shares of common stock pursuant to an at the market issuance sales agreement for net proceeds of $3.8 million. We raised a net of $18.3 million in the third quarter of 2023 from the public offering of our common shares and a net of $4.6 million from the sale of our common stock to Yulho.
Previous wording
We did not engage in commercial operations in 2024 and 2023. Our operations have been devoted to developing our Li AquaRefining battery recycling technology. During the six months ended June 30, 2024, Aqua Metals was focused on the continued operation of the pilot facility and the build out of our commercial facility. We did not earn any revenue during the three and six months ended June 30, 2024 and 2023. The following table summarizes our results of operations with respect to the items set forth below for the three and six months ended June 30, 2024 and 2023 together with the dollar and percentage changes in those items (in thousands).
Current wording
We did not engage in commercial operations in 2024 and 2023. Our operations have been devoted to developing our Li AquaRefining battery recycling technology. During the nine months ended September 30, 2024, Aqua Metals was focused on the continued operation of the pilot facility and the build out of our commercial facility. We did not earn any revenue during the three and nine months ended September 30, 2024 and 2023. The following table summarizes our results of operations with respect to the items set forth below for the three and nine months ended September 30, 2024 and 2023 together with the dollar and percentage changes in those items (in thousands).
Previous wording
Plant operations include materials, supplies related costs, salaries and benefits, consulting, outside services costs, inventory adjustments, depreciation, amortization, insurance, travel and overhead costs. Plant operations increased approximately $892,000 or 60.2% and $2,036,000 or 80.0% for the for the three and six months ended June 30, 2024 as compared to the three and six months ended June 30, 2023. The increase in plant operations for the three month ended June 30, 2024 was primarily due to an increase in payroll and payroll related fees of approximately $916,000, as we engaged our lab and engineering staff in operating the pilot facility and processing black mass, as well as $151,000 in supplies and materials offset by $196,000 decrease in professional fees. The increase in plant operations for the six month ended June 30, 2024 was primarily due to an increase in payroll and payroll related fees of approximately $1,472,000, as we hired additional staff and we engaged our lab and engineering staff in operating the pilot facility and processing black mass, as well as $302,000 in supplies and materials, $126,000 increase in insurance expenses and $89,000 in professional fees.
Current wording
Plant operations include materials, supplies related costs, salaries and benefits, consulting, outside services costs, inventory adjustments, depreciation, amortization, insurance, travel and overhead costs. Plant operations decreased approximately $153,000 or 8.6% and increased $1,882,000, or 43.6%, for the for the three and nine months ended September 30, 2024 as compared to the three and nine months ended September 30, 2023. The decrease in plant operations for the three months ended September 30, 2024 was primarily due to a decrease in payroll and payroll related fees of approximately $189,000, as we completed a reduction of force during August 2024. Management does not expect the reduction in force to materially impact its current pilot operations or continuing research and development. However, during the fourth quarter 2024 and until funding is received, we expect reduced employee and overhead expense. The severance and other non-recurring expenses related to the reduction in force were not material. The increase in plant operations for the nine months ended September 30, 2024 was primarily due to an increase in payroll and payroll related fees of approximately $1,283,000, as we hired additional staff and we engaged our lab and engineering staff in operating the pilot facility and processing black mass, as well as $261,000 in supplies and materials, $167,000 increase in insurance expenses and $129,000 in professional fees. These increases occurred prior to the workforce reduction in August 2024.
Previous wording
Research and development cost includes expenditures related to the improvement of the AquaRefining technology and the development of our lithium-ion battery recycling process. During the three months ended June 30, 2024, research and development costs decreased $162,000, or approximately 30.9% compared to the three months ended June 30, 2023. The decrease was driven by a decrease in payroll and payroll related fees of approximately $86,000, as well as $54,000 in supplies and materials. For the six months ended June 30, 2024, research and developments costs decreased $19,000, or approximately 2.0%, compared to the six months ended June 30, 2023.
Current wording
Research and development cost includes expenditures related to the improvement of the AquaRefining technology and the development of our lithium-ion battery recycling process. During the three months ended September 30, 2024, research and development costs increased $9,000, or approximately 2.3%, compared to the three months ended September 30, 2023. For the nine months ended September 30, 2024, research and developments costs decreased $10,000, or approximately 0.7%, compared to the nine months ended September 30, 2023.
Previous wording
We didn't recognize a gain on disposal of property, plant and equipment during the three and six months ended June 30, 2024 compared to a gain of $3,000 and $23,000 for the three and six months ended June 30, 2023, respectively. For the three and six months ended June 30, 2023, the gain on property, plant and equipment resulted from the sales of fixed assets.
Current wording
We recognized a loss on disposal of property, plant and equipment of $448,000 during the three and nine months ended September 30, 2024 compared to a gain of $23,000 for the three and nine months ended September 30, 2023. For the three and nine months ended September 30, 2024, the loss on property, plant and equipment resulted from the sale of fixed assets. For the three and nine months ended September 30, 2023, the gain on property, plant and equipment resulted from the sales of fixed assets.
Previous wording
General and administrative expense increased $577,000, or approximately 20.3%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 and $566,000, or approximately 9.7%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was driven by the the write off of the debt issuance costs of $563,000, previously representing a deferred asset.
Current wording
General and administrative expense decreased $67,000, or approximately 2.4%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023 and an increase $500,000, or approximately 5.8%, for the nine months ended September 30, 2024 compared to nine months ended September 30, 2023. The increase for the nine months ended September 30, 2024 was driven by the write off of the debt issuance costs of $563,000, previously representing a deferred asset.
Previous wording
The following table summarizes our other income and interest expense for the three and six months ended June 30, 2024 and 2023 together with the dollar and percentage changes in those items (in thousands).
Current wording
The following table summarizes our other income and interest expense for the three and nine months ended September 30, 2024 and 2023 together with the dollar and percentage changes in those items (in thousands).
Previous wording
The decrease in interest expense for the three and six months ended June 30, 2024 is due to the reduction on the note payable outstanding balance.
Current wording
The decrease in interest expense for the three and nine months ended September 30, 2024 is due to the reduction on the note payable outstanding balance.
Previous wording
We recognized approximately $99,000 and $245,000 in interest and other income during the three and six months ended June 30, 2024, respectively, a decrease from $348,000 and $414,000 compared to the three and six months ended June 30, 2023, respectively. The decrease in interest and other income is primarily due to the decrease in miscellaneous income from the non-recurring engineering agreement with 6K Energy.
Current wording
We recognized approximately $84,000 and $329,000 in interest and other income during the three and nine months ended September 30, 2024, respectively, a decrease of $405,000 and $574,000 compared to the three and nine months ended September 30, 2023, respectively. The decrease in interest and other income is primarily due to the decrease in miscellaneous income from the non-recurring engineering agreement with 6K Energy.
Previous wording
As of June 30, 2024, the Company had total assets of $33.7 million and working capital of $1.5 million.
Current wording
As of September 30, 2024, the Company had total assets of $28.5 million.
Previous wording
As of June 30, 2024, the Company had cash and cash equivalents of approximately $7.8 million, current liabilities of $7.9 million and an accumulated deficit of $235.1 million. The Company's current liabilities of $7.9 million include the note payable with Summit Investment Services, LLC* *in the amount of approximately $3 million due on February 1, 2025 as disclosed in Note 10. The Company has not generated revenues from commercial operations and expects to continue incurring losses for the foreseeable future. In order to satisfy our capital requirements, the Company anticipates that it will need to improve its liquidity position through equity or debt financings and/or reductions in operating costs, in order to satisfy its liquidity needs for the next twelve months. Management is devoting significant efforts to increasing liquidity, raising capital and developing its business.
Current wording
As of September 30, 2024, the Company had cash and cash equivalents of approximately $3.0 million, current liabilities of $7.1 million and a working capital deficit of $2.9 million. The Company's current liabilities of $7.1 million include the note payable with Summit Investment Services, LLC* *in the amount of approximately $3 million due on February 1, 2025 as disclosed in Note 10. The Company has not generated revenues from commercial operations and expects to continue incurring losses for the foreseeable future. In order to satisfy our capital requirements, the Company will need to improve its liquidity position through equity or debt financings and/or reductions in operating costs, in order to satisfy its liquidity needs for the next twelve months. Management is devoting significant efforts to increasing liquidity, raising capital and developing its business.
Previous wording
Management believes that the Company does not have sufficient capital resources to sustain operations through at least the next twelve months from the date of this filing. Additionally, in view of the Company’s expectation to incur significant losses for the foreseeable future it will be required to raise additional capital resources in order to fund its operations, although the availability of, and the Company’s access to such resources, is not assured. Accordingly, management believes that there is substantial doubt regarding the Company’s ability to continue operating as a going concern through the next twelve months from the date of this filing.
Current wording
Management believes that the Company does not have sufficient capital resources to sustain operations through at least the next twelve months from the date of this filing. Additionally, in view of the Company’s expectation to incur significant losses for the foreseeable future, and its current working capital deficit, it will be required to raise additional capital resources in order to fund its operations, although the availability of, and the Company’s access to such resources, is not assured. Accordingly, management believes that there is substantial doubt regarding the Company’s ability to continue operating as a going concern through the next twelve months from the date of this filing.
Previous wording
Net cash used in operating activities for the six months ended June 30, 2024 was $8,002,000. Net cash provided by operating activities for the six months ended June 30, 2023 was $5,472,000 which includes approximately $12,278,000 of cash received related to our lease receivable offset by operating expenses. Net cash used in or provided by operating activities during each of these periods consisted primarily of our net loss adjusted for non-cash items such as depreciation, amortization, stock-based compensation, and gain on the disposal of property, plant and equipment, as well as net changes in working capital.
Current wording
Net cash used in operating activities for the nine months ended September 30, 2024 was $11,637,000. Net cash provided by operating activities for the nine months ended September 30, 2023 was $2,222,000 which includes approximately $12,278,000 of cash received related to our lease receivable offset by operating expenses. Net cash used in or provided by operating activities during each of these periods consisted primarily of our net loss adjusted for non-cash items such as depreciation, amortization, stock-based compensation, and gain on the disposal of property, plant and equipment, as well as net changes in working capital.
Previous wording
Net cash used in investing activities for the six months ended June 30, 2024 was $9,762,000 and consisted mainly of cash utilized towards equipment deposits of $3,522,000 and purchases of fixed assets related to the build out of our commercial facility of $6,440,000, offset by $200,000 of cash received related to our note receivable. Net cash used in investing activities for the six months ended June 30, 2023 was $5,511,000 and consisted mainly of $4,300,000 utilized towards the purchase of the building located at 2999 Waltham Way McCarran, NV 89434 and $900,000 utilized towards purchases of fixed assets.
Current wording
Net cash used in investing activities for the nine months ended September 30, 2024 was $11,062,000 and consisted mainly of cash utilized towards equipment deposits of $3,975,000 and purchases of fixed assets related to the build out of our commercial facility of $7,452,000, offset by $350,000 of cash received related to our note receivable. Net cash used in investing activities for the nine months ended September 30, 2023 was $6,294,000 and consisted mainly of $4,300,000 utilized towards the purchase of the building located at 2999 Waltham Way McCarran, NV 89434 and $1,800,000 utilized towards purchases of fixed assets.
Previous wording
Net cash provided by financing activities was $9,075,000 for the six months ended June 30, 2024, consisting of $2,542,000 in net proceeds from the sale of Aqua Metals shares pursuant to the at-the-market offering, or ATM, and $7,306,000 in net proceeds from our May 2024 public offering, offset by $360,000 related to tax withholdings to cover RSU vesting and $413,000 related to debt issuance costs. Net cash provided by financing activities of $847,000 for the six months ended June 30, 2023 was approximately $2,784,000 in net proceeds from the sale of Aqua Metals shares pursuant to the at-the-market offering, or ATM, and $2,932,000 in net proceeds from the loan agreement secured with the Summit Investment Services, LLC offset by the $6,000,000 used to pay off the note payable and $577,000 related to tax withholdings to cover RSU vesting.
Current wording
Net cash provided by financing activities was $9,127,000 for the nine months ended September 30, 2024, consisting of $2,820,000 in net proceeds from the sale of Aqua Metals shares pursuant to the at-the-market offering, or ATM, and $7,306,000 in net proceeds from our May 2024 public offering, offset by $552,000 related to tax withholdings to cover RSU vesting and $424,000 related to debt issuance costs. Net cash provided by financing activities of $22,588,000 for the nine months ended September 30, 2023 was approximately $3,788,000 in net proceeds from the sale of Aqua Metals shares pursuant to the at-the-market offering, or ATM, and $2,931,000 in net proceeds from the loan agreement secured with the Summit Investment Services, LLC and $18.3 million in net proceeds from our July 2023 public offering and $4.6 million in net proceeds from the Yulho transaction, offset by the $6,000,000 used to pay off the note payable and $1,092,000 related to tax withholdings to cover RSU vesting.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
Net cash provided by financing activities